On March 1, 2002, the Yi-Ting Company issued bonds dated January 2, 2002 with the following characteristics: Face value $20,000,000 Coupon rate 7.5% Yield to maturity 8% Coupon payment dates June 30, Dec. 31 Maturity 16 years The Yi-Ting Company's year-end is December 31.

Assuming the Yi-Ting Company uses the effective interest method, Required

1. Prepare all journal entries relating to this bond issue for the year 2002.

Assume that on July 2, 2008; the company redeems one half of the bond issue on the open market at 98. Prepare the journal entry on July 2, 2008.